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TMI Blog2013 (6) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... nd disposed of by this combined order for the sake of convenience. 2. The only issue involved in the aforesaid appeal of the department is with regard to CIT(A) deleting the addition made by the Assessing Officer on account of proportional disallowance of interest on advance given to sister concerns. 3. Briefly the facts are, a search and seizure u/s 132 of the Act was conducted in case of the assessee and other group concerns on 1-2- 2008. In pursuance to notice issued u/s 153A of the Act, the assessee filed its return of income declaring total income of Rs.2,07,49,915. From the materials found during the search and seizure operation the Assessing Officer noticed that the assessee had diverted loans availed by it to its sister concerns w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more advances to the assessee . It was submitted that while the sister concerns have the balance of Rs.71,56,59,009/- the assessee has advanced Rs.68,28,56,200 to the sister concerns, hence no disallowance can be made. The CIT(A) after considering the submissions of the assessee in the light of the materials on record allowed the claim of the assessee and deleted the additions by concluding as under:- "The submission made by the authorized representative has been considered. It is seen that for the asst. year under consideration, the appellant company is seen to have received/purchases at Rs.71,56,59,009 against the appellant company's payments/sales at Rs.68,28,56,200. Accordingly, the appellant company enjoys the purchases/receipts from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces or sales made to the sister concerns. Hence, this ground of appeal is allowed." 6. The learned Departmental Representative relying upon the grounds raised before us submitted that the conclusion arrived at by the CIT(A) was not correct as he has considered fresh evidences in violation of Rule 46A of the IT Rules 1962. 7. The learned AR strongly supporting the order of the CIT(A) submitted that the Assessing Officer did not at all consider the facts and materials placed before him and has arbitrarily made the disallowance. It was submitted that the assessee had not only made advances to the sister concerns but has also received advances from sister concerns also. The learned AR drawing our attention to the details of advances to siste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concern. In the aforesaid factual situation the disallowance made by the Assessing Officer on allegation of diverting borrowed funds to the sister concerns is not borne out from record, hence, cannot be accepted. That besides, the fact that the assessee has business connection with its sister concerns is also suggestive of the fact that they are in the nature of trade advances only, hence cannot be considered as loans. In this connection, we draw support from the decision of the co-ordinate bench in case of DCIT V/s. Agarwal Global Steels. Therefore, looked into from any angle disallowance of interest made by the Assessing Officer cannot be sustained. So far as the contention of the learned Departmental Representative that the CIT (A) has c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on purchase of a property. The Assessing Officer by making the aforesaid additions determined the income at Rs.2,12,04,436/- and after set off of brought forward losses total income under normal provision was determined as Nil. The Assessing Officer however while computing MAT added the aforesaid amounts to the book profit declared by the assessee. 12. The assessee challenged such action of the Assessing Officer before the CIT (A). It was contended by the assessee before the CIT (A) that interest disallowance and unexplained investment cannot be added u/s 115JB to arrive at the book profit. In support of such contention, the assessee also relied upon the following decisions:- 1. Apollo Tyres Ltd. (255 ITR 273) (SC) 2. A.B. Hotel Ltd. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ITA 1691/Hyd/10) A.Y. 2005-06:- 15. The cross objection by the assessee is on the following ground:- "The learned CIT(A) in confirming the disallowance of interest at Rs.14,22,978 is unsustainable on facts and in law." 16. Briefly the facts are, while completing the assessment the Assessing Officer disallowed interest of Rs.1,81,06,330/- on the ground that the assessee had made interest free advance to its sister concerns. The assessee challenged the disallowance made in appeal filed before the CIT (A). The CIT(A) after considering the submissions of the assessee accepted the fact that the assessee has not only advanced certain amounts to the sister concerns but it has also received advances from the said sister concerns. He however re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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